What Happens When You Write a Bad Check?

Keep an eye on your balance to avoid fees and possible legal trouble

A couple looks over the details of a bounced check.
••• fizkes / Getty Images​

Writing bad checks can cause a variety of problems. You may have to pay significant fees, you could lose the ability to write checks in the future, you risk legal issues, and your credit can suffer. 

Learn what can go wrong if you write a check for more than you have in your bank account. And if you already wrote a check with insufficient funds, you’ll learn what steps to take next.

Key Takeaways

  • It’s easy to write a check for more money than you have in your bank account, but doing so has consequences. 
  • You’ll likely pay fees, and you may lose the ability to write checks in the future and get into legal trouble. 
  • To avoid problems, monitor your bank account closely and use strategies to avoid bounced checks.
  •  Anybody can make mistakes, so it’s wise to take advantage of electronic payment tools and leave extra cash in your checking account as a safeguard.

What Is a Bad Check?

A bad check is a payment that a check writer’s bank does not approve. The bank might reject a payment because there is not enough money in the account, the check writer requested a stop payment on the check, or for other reasons.

When you write a check, the payee (the person, business, or organization you’re paying) typically deposits the check to their bank account or tries to cash it. The receiving bank then submits the check to your bank to collect payment.

If you don’t have the funds available, you’re writing a bad check. Sometimes this is intentional: You know you don’t have the money, but you write the check anyway. In other cases, it’s an accident. There are several situations when you might reasonably believe you have money available:

  • A payment you expected (like a direct deposit from your job) did not hit your account.
  • A deposit or payment to you isn’t in your account yet.
  • A purchase with your debit card created a hold in your account (possibly for more than you really spent).
  • Somebody deposited a check you wrote long ago but forgot about.

When discussing a bad check with your bank or payee, you might hear the terms “bounced check,” “insufficient funds,” or “non-sufficient funds” (NSF).

Fees for NSF Checks

Bad checks can lead to extra costs.

After bouncing a check, expect to pay an NSF fee to your bank (usually $25 to $50 or a percentage of the check amount). You may also have to pay a fee to whomever you wrote the check. 

If you use overdraft protection or similar services at your bank, the bank might provide the funds to allow your check to go through. However, you often pay fees to your bank for advancing the money (and you’ll need to repay your bank).

In 2017, the Consumer Financial Protection Bureau (CFPB) reported that consumers paid as much as $17 billion in NSF fees from October 2016 to September 2017.

How Bad Checks Affect Your Credit

A bounced check doesn’t appear in your traditional credit reports, but your account could eventually go to a collection agency if you fall behind on payments. Debt collectors are likely to report to credit bureaus, and that information will hurt your credit scores. If your check is for a loan payment and you don’t resolve the issue quickly, your loan payment could be considered late, which can also damage your credit.

Bad Check Databases

If you have a history of writing checks with insufficient funds, it may be hard to get a bank account. Banks and credit unions partner with data providers to track consumer behavior, and those databases can prevent you from opening an account when you need one.

Merchants may also use databases, such as check verification services. Based on your previous check-writing activity, merchants could refuse to accept payment by check, and you’ll need to find alternative ways to pay.

When Bad Checks Are Illegal

In some cases, writing a check that bounces is illegal. For example, if you write a check when you know you don’t have the funds available (and with the intent to defraud the payee), you could be breaking the law. It’s also illegal to forge checks and use fake checks.

If you accidentally bounce a check, you may not face legal consequences. But when you intentionally write bad checks or make a habit of paying with checks that bounce, legal trouble may follow. In Virginia, for example, writing a bad check with the intent to defraud becomes a felony if the check’s value is $1,000 or more.

If you receive legal notices or an inquiry from law enforcement officials, contact an attorney. It’s critical to work with somebody who is familiar with the laws in your state and has experience with legal issues related to bad checks.

If you’re a merchant and your customers write checks with insufficient funds, see how returned checks work. You’ll find out what causes the problem, how to solve it, and how to prevent issues in the future.

How to Stop Writing Bad Checks

If you’re bouncing checks, take the following steps to break the habit and curb the consequences.

Monitor Your Balance

Keep track of how much you have available in your checking account, and remember that there’s a difference between your account balance and your available balance. It’s easy to find your balance by logging in online or checking your bank’s app on your mobile device. Text message inquiries can also provide a quick balance update.

Balance Your Account

Learning to balance your account is a vital skill for preventing problems; it tells you how much you have now and how much you’ll have in the future. In addition to avoiding bounced checks, you can spot identity theft and bank errors before things get out of hand.

Sign up to get alerts from your bank when your checking account balance falls below a certain amount.

Keep a Cushion

Keep some extra cash in your account as a buffer. Mistakes happen, and sometimes an extra $100 or $200 can help you avoid bigger fees and headaches.

Alternative Payment Tools

Checks don’t offer any way to know if you’re overspending. If you spend with cash, you always know what you can afford. But cash isn't always safe or practical. Debit cards are another option for spending the money from your checking account, and you can instruct your bank to reject purchases that will overdraw your account.